Online filing alternatives
| By Bonnie Cha (January 27, 2004) |
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Filing taxes online isn't a new phenomenon, but it's an increasingly popular alternative to traditional pen and paper and to software packages such as Intuit TurboTax and H&R Block TaxCut. Last year, about 53 million people filed their returns online, with good reason. Online filers typically receive their refunds within 14 days; traditional filers who mail in their returns can wait up to six weeks. The chances of human error decrease as well, since IRS employees don't have to manually input data from electronic forms into the main computer.
It's not all fun and games. As with anything you do on the Internet, there's always the question of security and privacy, especially pertinent considering all the sensitive information contained on IRS forms. Also, not everyone qualifies to file online. For example, you can't e-file if you earned income from a state in which you don't live.
If you do qualify and online filing sounds attractive, you'll have to choose where to do it. Numerous Web sites offer tax preparation, and each one delivers its own twists. Here's a sampling of the major players.
It's not all fun and games. As with anything you do on the Internet, there's always the question of security and privacy, especially pertinent considering all the sensitive information contained on IRS forms. Also, not everyone qualifies to file online. For example, you can't e-file if you earned income from a state in which you don't live.
If you do qualify and online filing sounds attractive, you'll have to choose where to do it. Numerous Web sites offer tax preparation, and each one delivers its own twists. Here's a sampling of the major players.
| 1040.com This site is a one-stop shop for tax information. A service of Drake Software, creators of forms package Drake Tax Solution, 1040.com lets you either file your taxes online or print out IRS forms. It also reminds you of important deadlines, and the Resource Center features a FAQ page and highlights the latest news from the IRS. |
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| CompleteTax Kill two birds with one stone at this site. While most providers offer to complete both your federal and state returns, usually at an extra cost, CompleteTax does both for $29.95. The site also features other tools, such as the Tax Projector for forecasting next year's taxes, and the Tax Guide, complete with a glossary. |
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| IRS Cut out the middleman and go straight to the source. The IRS offers two options for filing your taxes online: traditional e-filing and Free File. Regular e-filing can be done through a tax professional or via a personal computer. The Free File program allows eligible taxpayers to prepare and file tax returns online for free with any of the 16 companies in the Free File Alliance, including TaxAct.com and OnlineTaxes.com. Each company has different eligibility requirements based on factors such as state of residence and adjusted gross income. |
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| TaxCut H&R Block offers two flavors of its TaxCut program on the Web: Standard and Premium. Both provide step-by-step interviews to collect information, and the Premium version adds some extras, such as a video library, a free phone consultation with a tax adviser, and a virtual assistant to make sure you didn't miss anything. The services cost $24.95 and $39.95, respectively. |
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| TurboTax Intuit's Web offerings include TurboTax 1040EZ ($9.95), Basic ($19.95), Premier ($29.95), and Premier Home & Business ($49.95). Similar to its software counterparts and also cheaper, each version offers a tax interview to gather and plug information into the appropriate forms. Naturally, as you move up the product line, you get more features. For example, Premier adds assistance for planning early retirement, and Home & Business provides help for home office and business deductions. |
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